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David Kern, chief economist at the British Chambers of Commerce, said: ‘The UK economy still has challenges to overcome. Demand in the eurozone, our biggest trading partner, remains weak. We would urge the Bank not to jump the gun on interest rates.’

Italy crashed into recession for the third time since 2008, in the second quarter of the year, underlining the chronic weakness of the eurozone’s third-largest economy.

Figures from statistics agency ISTAT showed Italian GDP fell 0.2 per cent, having declined by 0.1 per cent in the first three months.

It followed growth of 0.1 per cent in the final three months of 2013 – the only quarter of growth in Italy since mid-2011.

Separate figures showed German industrial orders fell in June at the fastest pace since September 2011, fuelling fears about the health of the region’s biggest economy.

The German Economy Ministry said orders fell 3.2 per cent in June with demand from the single currency bloc down a punishing 10.4 per cent.

Slowing global growth and rising tensions between Russia and Ukraine have dented confidence in Germany and other eurozone countries in recent months.

Joerg Kraemer, chief economist at Commerzbank in Frankfurt, said the Italian and German figures ‘are a serious reason for concern and confirm that the euro area recovery is still sluggish at best’.